April 16, 2020

By Lynda Kiernan

St. Louis-based CoverCress Inc. (formerly known as Arvegenix) announced it has closed on $5 million in follow-on capital in support of the continued development and planned commercialization of CoverCress®, a new winter oilseed crop. 

This round was co-led by Fulcrum Global Capital and Hermann Companies, and included Prelude Ventures, Leaps by Bayer, St. Louis Arch Angels, Prolog Ventures, and additional commitments from certain company founders and employees.

Cover crops have generally been background noise in agricultural production. However, they have gained prominence as a low-cost, key part of regenerative farming methods, and a tool for farmers to use in combating climate change.

The National Climate Assessment (NCA) report issued in 2018 cited the greatest threats from climate change to agriculture is the degradation of critical resources such as soil and water, and goes on to state that cover crops and crop rotation are key to mitigating these effects. However, as of 2012, only 3 percent of U.S. farmland was planted in cover crops, according to the Census for Agriculture. 

“Sustainable crop production is threatened by excessive runoff, leaching, and flooding, which results in soil erosion, degraded water quality in lakes and streams, and damage to rural community infrastructure,” stated the NCA. “Management practices to restore soil structure and the hydrologic function of landscapes are essential for improving resilience to these challenges.”

CoverCress is planted at corn harvest in the fall, and is harvested just before soybean planting in May, enabling farmers in the southern regions of the Midwest to grow three crops every two years.

Since the company’s founding in 2013, CoverCress Inc. has worked using plant breeding and genome editing to develop the crop from the native plant, pennycress, and has participated in the USDA program – Integrated Pennycress Research Enabling Farm & Energy Resilience (iprefer) designed to optimize off-season pennycress production with the goal of commercializing the oilseed within five years. 

“This is a critical time for innovation that helps agriculture be a bigger part of the solution to the changing climate, said John Peryam, partner, Fulcrum Global Capital “CoverCress does this by making a low carbon intensity feedstock and a new source of carbon sequestration for Midwest farmers, without replacing the existing corn and soybean opportunity.”

Aside from increasing farmers’ income through the ability to plant an extra crop without the loss of corn or soybean seasons, CoverCress has oil and protein profiles similar to those of canola; it builds soil health, and holds soil and nutrients in place over winter, while also having the unique trait of a very low carbon density. And according to the USDA, Integration of the cover crop between corn and soybean rotations has the potential to yield as much as 2 billion gallons of oil per year, toward the goal of 50 billion gallons of biofuels in 25 years. 

“We have been very fortunate to have a committed group of investors. Our core group of investors have reinvested each opportunity since 2015,” said Jerry Steiner, CEO, CoverCress. 

“This stability has led to great progress in the challenge of developing a new crop and value chain. We are pleased that as we have advanced our crop development, farmers have shown great interest in learning how to integrate this new cash crop into their operations. They like this new cover crop opportunity that also generates income for them.”

Over the years, CoverCress has built its team to more than 20 members, with a leadership team in place that has more than 120 years of commercial agriculture experience. The company has also forged partnerships with Illinois State University, the University of Minnesota, and Western Illinois University.

“The broad partnership base is designed to enable this opportunity, originally from work at the USDA in Peoria IL, and advanced by these Universities to become a commercial opportunity for farmers across the Midwest,” said Steiner. “It’s something that no single partner could do alone.”

The company recently announced an expansion to its team, with the addition of Mike DeCamp joining the company in the role of chief operating officer. With more than 30 years of experience in agribusiness, his first responsibility will be to focus on building the value chain in preparation for the company’s 2021 commercial launch. Most recently DeCamp spent eight years with ag investment-focused Teays River Investments, after more than 10 years with Monsanto in various roles spanning legal, corporate strategy, and operational roles.

– Lynda Kiernan is Editor with GAI Media and daily contributor to the GAI News and Agtech Intel platforms. If you would like to submit a contribution for consideration, please contact Ms. Kiernan at lkiernan@globalaginvesting.com.